GRAIN HIGHLIGHTS: Top Stories of the Day

Date : 02/14/2018 @ 5:58PM
Source : Dow Jones News

GRAIN HIGHLIGHTS: Top Stories of the Day

TOP STORIES:

 

Soybean, Corn Futures Recover on Improving Outlook

Soybean and corn futures rose, recovering from overnight losses.

An improving supply-and-demand outlook for the crops generated buying interest on Wednesday, analysts said. On the one hand, traders are increasingly concerned by hot-and-dry weather in Argentina, which they expect to cut into this season's production. Weather forecasters said rain due next week wouldn't be enough to offset increasing stress on the crops.

That helped prices for those crops to rise on Wednesday after falling overnight. March-dated soybean futures rose 0.5% to $10.17 1/4 a bushel at the Chicago Board of Trade, which closed at the highest point in seven months. CBOT March corn futures rose 0.1% to $3.67 1/4 a bushel.

 

Bunge Reports Loss -- Update

The chief executive of Bunge Ltd. said agricultural firms can't count on deals alone to boost profitability, as the farm economy struggles under a global crop glut that has hurt grain prices.

The grain trading firm reported a quarterly loss Wednesday, pushing its shares down amid speculation the company could be bought by a larger rival. Chicago-based Archer Daniels Midland Co. has approached Bunge about a takeover, The Wall Street Journal reported last month.

Bunge's 48-cents-a-share loss for the quarter compared with a profit of $271 million, or $1.83 a share, in the prior-year period. On an adjusted basis, the company earned $103 million, or 67 cents a share, down from $1.70 a share a year earlier.

 

Mergers May Not Solve Grain Company Woes -- Market Talk

08:56 ET - Deal speculation has gripped the agricultural industry, with Archer Daniels Midland and Glencore both reported over the past year to have approached competitor Bunge about a deal. Bunge CEO Soren Schroder on the company's 4Q earnings call declines to address those reports, but does tell analysts that consolidation on its own won't be the answer to years-long struggles among agricultural commodity traders. Following five successive bumper crops in North America and another potential record South American harvest, "it's more how you operate that determines your profitability," versus sheer scale, Schroder says. "The entire industry and certainly ourselves are trying to adjust to a new environment." (jacob.bunge@wsj.com; @jacobbunge)

 

STORIES OF INTEREST:

 

Brazil Could Pick Up Soybean Slack for China -- Market Talk

09:28 ET - U.S. farmers and grain traders are nervously watching China's stance toward U.S. crops since the country recently opened an anti-dumping investigation into U.S. sorghum, after President Trump placed tariffs on imported washing machines and solar panels. Soybeans, where China is by far the biggest buyer, could present a much bigger target, and Bunge, the world's largest soybean processor, is hoping that "calm minds" prevail on the matter, according to CEO Soren Schroder. "Given the significance of the U.S. (soybeans) to China, I'd think this can be worked out," he says. "If not, we have plenty of beans in Brazil," referring to Bunge's extensive crop transporting and processing network there. (jacob.bunge@wsj.com; @jacobbunge)

 

Tyson Bulks Up in Grain to Feed Chickens -- Market Talk

16:48 ET - Tyson Foods is in the process of revamping itself as a packaged foods company, but the meat giant takes a page from the grain industry with the planned purchase of three Tennessee grain elevators from The Andersons, an Ohio grain and transport firm. Tyson says the facilities will provide feed for chickens that supply its plant in Union City, Tenn. as well as a new plant that's planned for Humboldt, Tenn. Owning such facilities is an important part of Tyson's broader effort to shift its portfolio toward higher-value products, like chicken raised without antibiotics, since Tyson can work directly with local farmers to get the crop varieties needed to formulate specialty feeds. (jacob.bunge@wsj.com; @jacobbunge)

 

THE MARKETS:

 

Cattle Futures Rise to 8-Month High

Cattle futures resumed their upward course, closing at the highest point in eight months.

Traders expect cash prices for physical cattle to rise this week, betting that a short-term supply squeeze will force meatpackers to raise their bids if they want to secure inventory for their plants.

Live cattle futures for February delivery rose 0.7% to $1.2765 a pound at the Chicago Mercantile Exchange, the highest close since June 12. The more active April contract also rose, as did futures for feeder cattle.

CME April lean hog futures rose 1.8% to $70.65 a pound.

 

(END) Dow Jones Newswires

February 14, 2018 17:43 ET (22:43 GMT)

Copyright (c) 2018 Dow Jones & Company, Inc.


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